Chapter Three Organizing for Advertising and Promotion:
The Role of Ad Agencies and Other Marketing Communication Organizations
Participants in the IMC Process
Advertiser (Client) Advertising agency Media organizations Marketing communications specialist organizations Collateral services Directmarketing agencies Sales promotion agencies
Public relations firms
Interactive agencies
Advertising Department Under Centralized System
President
Production
Finance
Marketing
Research and development
Human resources
Advertising
Marketing research
Sales
Product planning
Pros & Cons of Centralization
+ Positive
Better communications Fewer personnel Continuity of staff More top management involvement
- Negative
Less goal involvement
The Centralized System
Longer response time
Cant do multiple product lines
Decentralized Brand Management System
Corporate Research and development Human resources
Production
Finance
Marketing
Sales
Product management Brand manager Brand manager
Marketing services
Ad agency
Ad agency
Advertising department
Marketing research
Sales promotion Merchandising
Package design
Pros & Cons of Decentralization
+ Positive
Concentrated attention
- Negative
Ineffective decision making
Rapid problem response
The Decentralized System
Internal conflicts
Increased flexibility
Misallocation of funds Lack of Authority
Pros & Cons of In-House Agencies
+ Positive
Cost savings
- Negative
Less experience
More control
The In-house Agency
Less objectivity
Better coordination
Less flexibility
Ad Agencies Have Skilled Specialists
Artists
Writers
Researchers
Photographers
Media Analysts
Other Skills
Full-Services Agencies
Planning advertising
Creating advertising
Producing advertising Strategic market planning
Full range of marketing communication and promotion services
Performing research Selecting media
Interactive capabilities
Sales promotions
Direct marketing
Nonadvertising services
Package design Public relations and publicity
Typical Full-Service Agency Organization
Board of directors President VP creative services Writers
Art directors
VP account services Account supervision Account executive Media
VP marketing services Research Sales promotion
VP management and finance
TV production
Print production
Traffic
Office management Accounting Personnel
Finance
Services Provided by Agencies
Agency Services
Account Service
The link between agency and client Managed by the account executive
Marketing Services
Research department May include account planners Media department to obtain media space and time
Creative Services
Creation and execution of ads Copywriters, artists, other specialists
The Role of Creative Boutiques
Creative Boutiques
Provide only creative services
Full-service agencies may subcontract with creative boutiques
Ability to turn out inventive creative work quickly
Media Buying Can Be Specialized
Media Specialist Companies
Specialize in buying media, especially broadcast time
Agencies and clients develop media strategy
Media buying organizations implement the strategy and buy time and space
Young & Rubicam has handled Dr Pepper for over 30 years
Why Agencies Lose Clients
Personnel changes
Poor Poor Performance or performance Service
Unrealistic demands
Changes in strategy
Declining sales Payment conflicts Policy changes
Poor communications communication Changes Changes in size in size Conflict of interests
Personality Personality conflicts conflicts
How Agencies Gain Clients
Referrals
Presentations
Solicitations
Public Relations
Image, Reputation
Direct-Marketing Agency Activities
Database management Direct mail
DirectMarketing Agencies
Media services
Creative
Research
Production
Activities Performed by Sales Promotion Agencies
Promotional planning
Creative work and research Tie-in coordination Fulfillment Premium design and manufacturing Catalog Catalogproductions production Contest/sweepstakes management
Functions Performed by Public Relations Firms
Strategy development
Damage control
Generating publicity
Program planning
Lobbying Public affairs Image portrayal
Functions Performed by Interactive Agencies
Web banner ads
CD-ROMs
Web sites
Interactive Media Creation Kiosks
Text messages
Search engine optimization
Marketing Research Companies
Planning and implementing research Information application
Analysis and interpretation
Primary data collection
qualitative & quantitative
Secondary data collection
Pros & Cons of Integrated Services
+ Positive
Greater synergy
- Negative
Budget politics
Convenience
Integrated Services
Poor communication
Single image for product or service
No synergy
Obstacles to Implementing IMC
Consistent Consistent execution execution
Many Many elements elements to to handle handle
Internal Internal turf turf battles battles
Compensation Measuring Measuring campaign campaign success success Fear Fear of of budget budget reductions reductions
Agency Agency egos egos
